With the beginning of a new year it is time to track your short sale progress and financial fitness. This week take 15 minutes to determine your net worth. Not only will it provide the foundation for determining your level of success throughout 2010, but it is a great way to obtain a realistic indication of your fiscal health and wellbeing.
1. To calculate your net worth simply sit down and add up the value of all your assets including home, cars, jewelry and anything else that could be sold or liquidated to generate cash. It is up to you whether or not to include your personal home or dwelling. Since you need a place to call home, many experts believe your primary residence should be excluded from the net worth calculation. On the other hand, if you can take a home equity loan or otherwise access cash from the property it may be fine to include the amount above and beyond what renting a home would cost.
2. Next, make a second list containing all debts and obligations; taxes, credit cards, student loans and other liabilities should be included.
3. Subtract #2 from #1 or, to express it another way, subtract all the debts and obligations from your assets. If the total is positive, then congratulations...you have a positive net worth. If the number is negative it is time to do some serious reflection on your financial status. Remember, it's not necessarily related to the total amount of debt you owe but rather the total amount of assets at your disposal.
4. Once you have determined your net worth, set a realistic financial goal for 2010. If your net worth is negative, determine how many short sale deals will be required to put you into positive territory. If your net worth is positive, determine how much you want to increase it as a percentage then track your progress each month. Not only is it quick, easy and effective...but tracking your net worth is actually fun once you start showing progress!
Besides, it only takes 15 minutes. In less time than it takes to waste another coffee break you can take the first step in changing your life with short sales. Tune in next week for another 15 minute resolution designed to jump-start your short sale investments and transform your financial life. Meanwhile, have a great weekend!
See you at the top!
